ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Stocks

China Unicom shares up as six-month profit increases 69%

Structural reforms in group allow Nomura to maintain 'buy' rating

HONG KONG -- China Unicom (Hong Kong) shares bounced back sharply in Hong Kong on Monday after the telecommunications company announced a 69% increase in its net profit for the first six months of the year.

The stock hit a high of 12.26 Hong Kong dollars, up HK$0.88, or 7.73%, from Friday.

Investors welcomed the announcement after Friday's close that the company made $2.4 billion yuan ($360 million) in net profit for the six-month period.

Sales fell about 1.5% to 138.2 billion yuan due to lackluster performance of its broadband operations amid increasing competition. By contrast, mobile services' sales grew 5%. Operating costs dropped 2.5% from a year before.

Nomura International (Hong Kong) welcomed the cost adjustment, saying in a letter to investors published Friday that it was better than expected.

As for the latter half of the year, China Unicom said it expects further downward pressure on its earnings as the company plans to abolish roaming charges for domestic mobile communications on Sept. 1. The decision was made in response to a Chinese government request.

A China Unicom affiliate has been shifting to a mixed ownership structure by accepting private capital, part of Beijing's reform of state-owned companies. Market players are largely hopeful. "The reform will improve the group's overall capital structure," said Francis Kwok, managing director at Freeman Securities.

The reform raises hopes that shareholders will be rewarded over the long term, Nomura International predicted, keeping its stock rating for China Unicom at "buy" -- its highest rating -- and its target share price at HK$14.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media